The Council of Trade Unions welcomed the return of growth in the New Zealand economy. Statistics New Zealand data released today showed quarterly GDP growth of 14% – breaking the previous six-month decline brought on by COVID-19 and the associated international downturn. On an annual basis GDP declined 2.2%, showing the economy has not yet fully recovered and that further support will be needed to sustain growth. Importantly, GDP per capita showed an increase of 13.8% for the quarter but showed a continued fall of -4.3% on an annual bass – the largest fall on record.
CTU Economist and Policy Director Craig Renney said “the GDP data today demonstrates the strength of the economy, with growth returning to most sectors. While this is only one data point, and our recovery is still fragile, it is welcome news.”
“The economy and jobs were protected during COVID-19 by the hard work and sacrifice of New Zealanders, together with historic levels of investment from the government. It is important that this essential investment continues and that the positive economic momentum in the economy is not lost. The government needs to continue to support working people and business with sustained investment needed over the long-term.”
“This is particularly critical in making sure that we rebuild better, that we create a better post COVID country. Recovery should see the benefits of that growth being felt by all New Zealanders. The Government must use this opportunity to drive a more productive, sustainable, and inclusive economy in the future. Importantly, this Government must deliver the well-paid and secure employment that will sustain our recovery into the future,” Renney said.
Highlights from the GDP data today:
- Growth was driven by increases in expenditure by households (up 14.8% quarterly) and by spending on residential buildings (up 42% quarterly)
- GDP from retail, accommodation and restaurants rose 42.8% quarterly, bouncing back from COVID-19 restrictions
- GDP from construction rose 52.4% on a quarterly basis but was still 5.1% lower than last year.
- Business investment rose 20.7% in the September quarter, regaining more than the 19.8% fall seen in the June quarter and demonstrating increasing business confidence in the economy
- The recovery is relatively stronger than that being found in Australia, Canada, and other trading partners.